As many students and parents are reviewing their financial aid award letters, estimating your true college cost is very important. In an interest article written by Byrd Pinkerton titled “A College Education Costs Even More Than You Thought It Did”, Byrd points out some key points to estimating your true college cost.
The article is based on a study from the Wisconsin Hope Lab, a part of the University of Wisconsin-Madison. The study tried to identify key cost factors that are misunderstood or assumed when paying for college. The sticker price of various colleges was compared to the regional cost-of-living data from the government. Over 6,000 students participated in this study with most from being from Wisconsin. These are summarized in the “The Real Price of College”.
Here are the Key Points:
- College Cost of Living estimates are too low
- Students living at home aren’t always saving money
- Tuitions will vary by program
- Lower cost options such as meal plans are not always cheaper
- Financial aid calculators overestimate parent’s ability to pay
- Net cost will normally increase more than expected each year
Underestimating college costs, results for many students in a decline in completion rate. This is especially true for lower income students and is a consistent predictor for colleges. Many colleges are now establishing financial literacy programs to improve the graduation statistics. These financial literacy programs reside in various offices depending on the college. The most common are in student life or financial aid departments.
In our January 2016 blog, we wrote an article titled, “College Students Face Financial Stress”. In this article, we discuss the various ways paying for college affects both the stress of the student but also how it prevents some students from purchasing the required academic materials needed for class. All of this has the cascading downward effect for the student in relation to poor academic performance and retention.
In most of my college funding presentations, I include a slide that addresses the financial outcome. It is the major reason that we developed EFC PLUS College Cost Analyzer. The college funding financial information is very limited due to a variety of reasons. Families need to better prepare themselves and their children for this investment.